Economic recovery across most of the world remains uneven and fragile. Lean economic growth coupled with heightened volatility has presented a challenging environment for investment managers. Furthermore problems in the insurance industry have been compounded by massive payouts following natural disasters, such as cyclones, floods and earthquakes. Analyse the operations of insurance companies and describe how their profitability has been affected by the prevailing economic environment. How are insurance companies responding to these challenges? (Maximum of 750 words)